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Number of ATMs, IT investments, bank profitability and efficiency in Greece

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  • Georgia Giordani
  • Christos Floros

Abstract

This paper investigates the effect of automated teller machines (ATMs), information technology (IT) investments and other determinants on the efficiency and profitability of Greek commercial banks. Following the two-step procedure: 1) efficiency is derived via the non-parametric data envelopment analysis (DEA) technique under the variable returns to scale (VRS) assumption; 2) efficiency scores are linked to a series of determinants of bank efficiency using a Tobit regression model. We find that profitability (ROAA and ROAE), ATMs and capitalisation show a negative impact on the efficiency of Greek banks. We also report that banks' size, capitalisation, IT investments and ATMs do not have any effect on the ROAA or the ROAE but they have a positive effect on the fees and commissions. However, we find that ATMs have a negative effect on the net interest income.

Suggested Citation

  • Georgia Giordani & Christos Floros, 2015. "Number of ATMs, IT investments, bank profitability and efficiency in Greece," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 17(2), pages 217-235.
    • Handle: RePEc:ids:gbusec:v:17:y:2015:i:2:p:217-235
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    Cited by:

    1. Mustansar, Talreja, 2023. "Financial innovation, technological improvement and bank’ profitability," OSF Preprints 8wy95, Center for Open Science.
    2. Tariq Abbasi & Hans Weigand, 2017. "The Impact of Digital Financial Services on Firm's Performance: a Literature Review," Papers 1705.10294, arXiv.org.

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